UPDATE 4-Obama pitches plan to fix crumbling U.S. roads, bridges

Reuters Staff

4 Min Read

By Roberta Rampton

ST PAUL, Minn., Feb 26 (Reuters) - President Barack Obama announced on Wednesday a four-year, $302 billion plan to repair the country’s crumbling roads and bridges, but the proposal, which relies on tax reform for funding, is not expected to gain traction on Capitol Hill.

Congress faces a Sept. 30 deadline to renew federal funding for transportation programs, and the Highway Trust Fund that helps pay for road and bridge projects is teetering on insolvency.

“If Congress doesn’t finish a transportation bill by the end of the summer, we could see construction projects stop in their tracks, machines sitting idle, workers off the job,” Obama said, while standing in a refurbished train and bus station.

The highway fund has traditionally been replenished through a tax on fuel. But it no longer collects enough revenue to cover infrastructure needs and Congress has all but ruled out hiking the 18.4-cents-a-gallon gasoline tax.

Obama’s four-year plan would instead use revenues raised by ending some tax breaks, freeing up $150 billion for transportation. But that could only happen through corporate tax reform, a political long shot ahead of November’s mid-term elections.

Speaker of the House of Representatives John Boehner told reporters that a bailout for the highway fund likely would be out of the question for his caucus.

“Meeting with the president yesterday, this is one of the issues that was discussed. We’ve got to find a funding mechanism to fund our infrastructure needs,” the Ohio Republican said.

“I wish I could report to you that we’ve found it, but we haven‘t,” Boehner added.

Senator Barbara Boxer, head of the committee that oversees work on the highway bill, said on Wednesday that Obama’s plan was not likely to pass Congress.

“I think it’s good, but I don’t hold out hope for it,” she told a conference of state transportation officials in Washington.

But Transportation Secretary Anthony Foxx told reporters traveling with Obama that it was important for all sides to start talking about how to avert what he called a transportation funding “cliff.”

“There will be voices that say one thing or another can’t get done,” Foxx said. “I think the most important thing is that the ideas need to be put on the table.”

Obama’s plan would fill the gap in the Highway Trust Fund and would invest an additional $90 billion in infrastructure projects, Foxx said.

Separately on Wednesday, the top Republican tax writer in Congress proposed a tax reform overhaul that included dedicating $126.5 billion to the Highway Trust Fund for infrastructure investments over eight years.

In his plan, House Ways and Means Chairman Dave Camp said the money for infrastructure would come from reforms in the tax code.

Reaction to the plan was mixed, but the White House said Camp’s approach was encouraging.

Meanwhile in St. Paul, Obama also launched a competition for $600 million in grants for transportation projects through a program that leverages funds from the private sector and state and local governments. The spending has already been approved by Congress.

It is the sixth round of grants for the program, called Transportation Investment Generating Economic Recovery (TIGER), which has so far funded 270 projects with $3.5 billion.

Obama said the grants would result in jobs for construction workers hit hard by the recession.

“We’ve got ports that aren’t ready for the next generation of supertankers. We’ve got more than 100,000 bridges that are old enough to qualify for Medicare,” he said.

“Nobody knows better than Minnesotans, when we’ve gone through a winter like this - roads are wrecked, full of potholes, all across the country,” Obama said.